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The Importance of IP in Transaction Valuations - What to Look for During Due Diligence
Whether an entity is seeking to invest in a start-up or maturing company, is in the shoes of a developing company looking for further investment, or is seeking to acquire or sell a product line or other corporate assets, intellectual property (IP) often lies at the heart of the transaction.
A Perfect Storm for Increased Patent Litigation in 2026
Patent litigation in the United States is on the brink of a transformative year. At the policy level, the United States Patent and Trademark Office (USPTO) has embraced a firmly pro-patent legal landscape: prioritizing strong patent rights while narrowing the administrative pathways that have been used over the past decade to challenge those patent rights. At the same time, the increasing accessibility of powerful offensive tools, including in particular AI-powered tools, has made it far easier for patent owners to identify potential infringers than ever before.
Patenting Play: Analyzing Recent Video Game Play Patents Jacqueline Chan
The video game industry is a dynamic space that encourages innovation, with game developers often creating and employing novel technology and game design elements. This is a quickly growing industry: in 2024, Straits Research valued the gaming industry at approximately $221.24 billion and projected the industry to reach $424.23 billion by 2033. As a result, gaming companies are constantly looking to protect their innovations in this space with intellectual property protections that can strengthen the company's market position and protect its most prized assets.
Our Take on AI: December 2025
AI Patent Strategy: Courts vs. Agency Guidance: Securing AI patents requires navigating a disconnect between USPTO guidance and federal case law. While the USPTO has attempted to provide clearer eligibility signposts, the Federal Circuit's September 2025 decision in Rideshare Displays v. Lyft explicitly declined to adopt agency guidance, emphasizing that it is not binding on the court. Additionally, the Recentive v. Fox Corp. decision, at least for now, signals that merely "wrapping" known processes in AI terminology fails to establish subject matter eligibility. (Recentive petitioned the Supreme Court to overturn the decision in late October 2025, and a responsive brief is due in late November; Baker Botts represents Recentive in this effort.). Beyond the U.S., the European Patent Office is setting a high bar for enablement, requiring detailed disclosures of model architecture and training data characteristics—standards that may eventually influence U.S. requirements. Partner Christopher Palermo analyzes these conflicting standards and offers drafting best practices here: "Navigating the New Landscape of AI Patent Protection."
DMA and GDPR Intersection: On October 9, 2025, the EDPB and European Commission issued joint guidelines clarifying that "Gatekeepers" cannot use the Digital Markets Act (DMA) to dilute GDPR compliance. The guidelines emphasize that the two frameworks must be applied coherently: Gatekeepers must obtain valid GDPR consent—which is granular, neutral, and reversible—before combining personal data across services. Furthermore, the expansion of data portability under the DMA to include real-time flows must be executed without compromising data protection standards. Nick Palmieri details how these regulations interact and what this means for consent architectures here: "EDPB and European Commission Issue Joint Guidelines on Intersection of DMA and GDPR."
Italy's National AI Law: Italy has become the first EU member state to enact comprehensive national AI legislation (Law No. 132/2025). Crucially, the law is explicitly bounded by the EU AI Act, prohibiting the imposition of obligations that exceed EU standards. The legislation establishes a governance framework involving the Agency for Digital Italy and the National Cybersecurity Agency and criminalizes the use of AI to create misleading "deepfakes" that cause unjust harm. The law also codifies a "human-in-the-loop" principle for the judiciary and professional services, ensuring AI remains a support tool rather than a replacement for human judgment. More specifics can be found here: "Italy's AI Law: A National Framework Bounded by the EU AI Act."
Regulating AI in Mental Health: Illinois has enacted the "Wellness and Oversight for Psychological Resources Act," the first U.S. state law specifically regulating AI in professional mental health services. The law draws a bright line between permitted administrative support (such as scheduling and billing) and prohibited independent therapeutic interaction. Licensed professionals cannot allow AI to make therapeutic decisions or generate treatment recommendations without oversight. The law also mandates written consent before AI is used to record or transcribe clinical sessions. Michelle Molner examines the compliance requirements and civil penalties associated with this new legislation here: "Illinois Enacts First-in-the-Nation Guardrails on AI Therapy."
November 2025 Intellectual Property Report Recap
In case you missed it, here is a link to our November 2025 Intellectual Property Report.
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